2020 ANNUAL REPORT
UNITY BANCORP, INC. (Nasdaq: UNTY) is the
holding company for Unity Bank, a commercial bank
insured by the FDIC, headquartered in Clinton, New
Jersey. The Bank offers complete deposit and lending
solutions to businesses and consumers.
Small Business is BIG here is a mantra the
Bank lives and breathes. Unity delivers a holistic
approach to business clients leveraging seasoned
Commercial and SBA lending expertise with deposit
products and services with the latest technology
advantages. The Bank’s brand promise of Growing
with You is applied to all Unity stakeholders. The
Bank is dedicated to the growth of our communities,
customers, employees and shareholders.
THE BAN K’S BR AND PROMI SE O F
growing with you!
IS APPLIED TO ALL UNITY STAKEHOLDERS.
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FI NAN C IAL HIGHLIGHTS
Amounts in thousands, except per share data
and performance ratios
Year ended December 31,
2020
2019
2018
Selected Results of Operations
Interest income
$
78,915
$
75,648
$
67,263
Interest expense
Net interest income
Provision for loan losses
Noninterest income
Noninterest expense
Provision for income taxes
Net income
Per Share Data
Net income per common share - Basic
Net income per common share - Diluted
Book value per common share
Market value per common share
Cash dividends declared on common shares
Selected Balance Sheet Data
Assets
Loans
Allowance for loan losses
Securities
Deposits
Borrowed funds and subordinated debentures
Shareholders’ equity
Common shares outstanding
Performance Ratios
Return on average assets
Return on average equity
Efficiency ratio
Net interest margin
14,480
64,435
7,000
12,946
39,262
7,475
18,055
57,593
2,100
9,539
34,717
6,662
13,516
53,747
2,050
9,031
33,421
5,388
23,644
$
23,653
$
21,919
$
2.21
2.19
16.63
17.55
0.32
$
2.18
2.14
14.77
22.57
0.31
2.04
2.01
12.85
20.76
0.27
$
$
$ 1,958,914
$
1,718,942
$ 1,579,157
1,627,817
1,425,558
1,304,566
(23,105)
47,571
(16,395)
66,564
(15,488)
63,732
1,557,959
1,250,114
1,207,687
210,310
173,911
10,456
293,310
160,709
10,881
220,310
138,488
10,780
1.35 %
1.54 %
1.53 %
14.20
50.80
3.85
15.86
52.00
3.95
17.10
53.07
3.97
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Compounding crisis began a new decade that will
not fade quickly from our memories. During such
unprecedented times it is easy to be pessimistic
and feel helpless. It is during these times that our
commitment to small business and our community
guides us. In 2020 we saw our duty to mobilize
and help our customers tested. Although we had
to pivot how we work, we continued to serve our
customers and keep employees safe. Covid-19
protocols were put in place. Customers received
timely communications. In addition, training and
support was provided on all the options at their
disposal to ensure service was not disrupted.
ALTHOU GH WE HAD TO PI VOT H OW
WE WOR K , WE CONTIN UE D TO
SERVE OUR CUSTOMERS AND KEEP
EMPLOYEES SAFE.
We embraced the federal Paycheck Protection
Program (PPP) and actively communicated
with our customers to help them navigate the
application process and provide needed support
during this highly stressful time. We helped
customers secure over 1,200 PPP loans totaling in
excess of $140 million to provide their businesses
with desperately needed funds. Staff members
responded to the call and worked long hours from
home to meet the program’s fast-paced deadlines.
In addition, the bank has prudently worked
with borrowers that were impacted hardest by
Covid-19 and having difficulty meeting their
contractual obligations. We are happy to report
that the number of loans on payment deferrals
have significantly declined during the fourth
quarter.
Despite the challenges, the commercial
lending division still grew 10% for the
year.
Our Residential Mortgage Program achieved
a record $450 million in mortgage originations,
representing a 177% increase over the previous
year. While experiencing a refinance boom, we
continued to build relationships producing new
purchase volume of 51% of total volume, almost
10% higher than industry average; evidence that
we gained market share on the purchase money
mortgage side. Over $300 million of production
was sold into the secondary market representing
a significant increase over 2019. We are well
positioned for continued growth in this division.
We also reached out to our communities. We
stepped in early to provide funds for a free-
standing Respiratory Illness Center to triage
patients at Hunterdon Medical Center in March
to meet surging demand. Many of the non-profits
we support struggled with increasing needs
and traditional funding events cancelled. We
stepped in to support organizations in alternate
ways and donations. We provided additional
support to America’s Grow-A-Row, a non-
profit organization that grows and gleans fresh,
healthy fruits and vegetables that are donated to
those facing hunger throughout New Jersey. We
recognize this increased need will not disappear
as quickly as it arose. We have made an on-going
pledge for additional assistance through 2021 to
help those most vulnerable.
Our continued investment in technology
allowed us to meet demands for electronic
banking quickly and efficiently. Our
well-established personal and business
mobile banking apps continue to
serve more customers. Our call
center supported fast learning curves and an influx of help
requests from customers utilizing these services more than ever
before. We pivoted quickly to support employees working from home
and implemented Teams for enhanced virtual collaboration.
Amid the volatile environment we delivered strong results. Our net interest
margin stood up, one of the strongest in the state, at 3.85%. Record mortgage
performance and expense control contributed significantly to a year-end ROA
of 1.35%. Despite the challenges, we were able to keep non-performing assets
to under 1%.
In 2020 Unity ranked 15th nationally on the American Banker magazine list
of the Top 200 Publicly Traded Community Banks with less than $2 billion
in assets. Unity was the top ranked New Jersey community bank on this
respected industry list. Nationally 511 institutions fit the category for the
list. Unity Bank has been on the list for five consecutive years. In addition,
Unity Bank was named one of the best places to work in NJ for the fourth
consecutive year by NJBiz.
The unity of our employees provided tremendous strength and we are deeply
thankful for their dedication. We appreciate the continued support of our
customers, Board of Directors and shareholders. We share great hope for 2021
and are committed to supporting all our communities as we heal and grow.
David D. Dallas
Chairman of the Board
James A. Hughes
President & CEO
DILUTED EARNINGS PER SHARE
DIVIDENDS PER SHARE
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
$20.00
$15.00
$10.00
$ 5.00
$ 0.00
$0.35
$0.30
$0.25
$0.20
$0.15
$0.10
$0.05
$0.00
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
BOOK VALUE
MARKET PRICE
$25.00
$20.00
$15.00
$10.00
$ 5.00
$ 0.00
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
neighborhoods is what a community bank
does…it is what Unity Bank does. We continued
to strengthen and position our residential and
commercial lending teams and processes in 2020 to
enable us to better serve our customers in 2021 and
beyond.
S Supporting local people, their businesses and
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Under challenging market conditions, to say the least,
our residential lending team excelled. We achieved
core commercial loan and deposit growth, where
others contracted, and maintained solid credit quality
backed by a top tier industry capital position to
be able to weather additional or continued market
turbulence should the need arise.
As always, we continue to focus on our customers,
core products, existing territories, and to build and
maintain deep relationships with strategic referral
partners.
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LENDING PORTFOLIO
51%
Commercial
Loans
35%
98.08%
SBA
Loans
PPP
Loans
Consumer
Loans
3%
8%
9%
Performing
30-59 Days
Delinquent
.96%
Seriously Delinquent
.96%
29%
Residential
Mortgage
Investment
65%
Owner
Occupied
5 YEAR LOAN GROWTH
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2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
0
$100
$200
$300
$400
$500
$700
$800
$900
in Millions
RESIDENTIAL MORTGAGE
DISTRIBUTION
RESIDENTIAL MORTGAGE
PERFORMANCE
Investment
SBA
Loans
PPP
Loans
Consumer
Loans
3%
8%
9%
29%
Residential
Mortgage
51%
Commercial
Loans
35%
98.08%
65%
Owner
Occupied
Performing
30-59 Days
Delinquent
.96%
Seriously Delinquent
.96%
banking easier and safer for our customers.
E We continue to invest in technology that makes
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We introduced Zelle®, providing our customers with
a fast, safe and easy way to send and receive personal
payments in October 2020. In the first three months,
new users are outpacing previous person-to-person
payment system enrollments significantly. This
solution puts our offering on par with leading large
commercial banks.
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Over 3,500 new customers signed up for Mobile
Banking; Unity customers now have over 20,000
enabled devices using personal and business mobile
banking. Adoption of eco-friendly eStatements
continued in 2020.
TECHNOLOGY INFRASTRUCTURE
INVESTMENTS PROVIDED NEW TOOLS
AND ENHANCEMENTS FOR EMPLOYEES
TO SERVE OUR CUSTOMERS.
Our business online banking application was
upgraded with an improved user interface. Strong
adoption continues for Card Control, which offers
fraud protection and real-time alerts. This product
has seen over 3,000 new enrollments in the first year,
validating our customers approval of added security
offerings. Mobile Deposit usage has doubled in the
past 24 months and temporary replacement debit
cards were made available at all branches.
Empowering employees with the secure
technology needed to succeed.
We have taken extensive actions to enhance our BSA
(Bank Secrecy Act) department. We added additional
human resources, automation and risk mitigations
by upgrading our current software. We continue to
upgrade our policy and procedures in
the BSA and RISK area to strengthen
the banks BSA program. We engaged
consultants to help us ensure that the project is
completed in an effective manner.
Technology infrastructure investments provided
new tools and enhancements for employees to serve
our customers. Microsoft Teams was adopted, providing
a virtual collaboration platform facilitating real-time
collaboration for both onsite and remote workforces.
In order to better support remote work abilities for
our Unity Bank employees, investments in virtual
collaboration hardware were implemented. Abrigo, our
loan origination system launched in 2019, continues to
show agility in adapting to the SBA Paycheck Protection
Program guidelines to offer our small business customers a
streamlined approach for application through forgiveness.
The pandemic brought substantial increase to an already
high cyber threat environment. Investments were made
to systems in order to enhance cyber security mitigations.
Unity Bank continues to monitor all industry cyber security
alerts, trends including Cybersecurity and Infrastructure
Security Agency (CISA) and Information Systems Audit
and Control Association (ISACA) guidance. Recent events
in the news, related to cyber security and “Supply Chain
Attacks” involving SolarWinds were carefully monitored
and reviewed. Unity Bank does not utilize SolarWinds
products internally.
Unity Bank is committed to its technology investments in
order to provide sound information security practices and
an excellent customer experience.
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2020 challenged the bank to support the
community in new, innovative ways. The
pandemic stifled community fundraising events
and created a greater need for necessities, like
financial stability, food and shelter, throughout
our footprint.
THIS YEAR’S ANNUAL SERVICE PROJECT
REACHED MORE LIVES THAN EVER
As the pandemic gained momentum, a
donation was made to the Hunterdon
Healthcare Foundation to create a free-standing
Respiratory Illness Center to triage patients with
Coronavirus. Unity continued its commitment
throughout the year donating over $165,000
to local non-profits and community events.
Efforts included donating meals to frontline
healthcare workers and supporting Hunterdon
Strong, a telethon designed to raise funding
for local non-profits serving our community.
Unity Bank switched gears to host its Annual
Charity Car Show virtually. The car show raised
funds for the Family Promise of Hunterdon
and Warren Counties, organizations that help
homeless community members find sustainable
independence.
$34,200
2020
$28,500
2019
$22,800
$22,100
2018
2017
$18,700
2016
In 2020, the Bank strengthened their relationship with
America’s Grow-A-Row, a nonprofit organization that fights
food insecurity in New Jersey and Eastern Pennsylvania.
Through the season, Unity sent volunteers to plant and
harvest produce in the fields and increased its financial
contribution to the organization as the need for food grew
across the community. The Bank also pledged $25,000 of
support and monthly volunteers during the 2021 season.
This year’s annual service project reached more lives than
ever before. Every year, Unity employees donate to the local
Food Banks through voluntary payroll deductions and Unity
matches the total donation at the end of the year. Over the
past 5 years, the donations have almost doubled. In 2020,
$34,200 was disbursed between 19 local food banks.
The bank will continue in its commitment to uplift the
community it serves in the years to come.
Small Business is BIG here is our mantra. In 2020, the bank recognized an
increased need to support local businesses. Our marketing efforts shifted
to help our business customers and we embraced the federal Paycheck
Protection Program (PPP). We processed over 1,200 PPP loans in the first
round and are working on another 900 in round 2.
Supporting Small
Businesses Makes
a BIG Difference
Our fall billboard campaign featured
messaging of “Supporting Small Businesses
Makes a BIG Difference” and “Small
Businesses need BIG Support.” We
partnered with NJ Advanced Media to
offer free advertisement for our customers
in the business industries hit hardest by
the pandemic. Ads appeared in local
newspapers and digital properties. This
program was designed to help draw
customers back into businesses and to
connect personally with our business
customers to let them know we are there to
support them and see them through these uncertain times. We are dedicated
to the economic recovery of small businesses within our footprint and will
continue our efforts in 2021 and beyond.
support
SMALL BUSINESSES
CLINTON, NJ
908-735-0402
unitybank.com
EQUAL HOUSING LENDER | MEMBER FDIC
Executive & Senior Management
James Hughes
President
Chief Executive Officer
Luisa Franco
First Vice President
BSA/AML/OFAC Officer
Janice Bolomey
Executive Vice President
Chief Administrative Officer/
Director of Sales
Vincent Geraci
First Senior Vice President
Director of Mortgage Lending
John Kauchak
Executive Vice President
Chief Operating Officer
David Bove
Senior Vice President
Chief Technology Officer
Christopher Burke
First Vice President
Senior Portfolio Manager
Laureen Cook
Senior Vice President
Chief Accounting Officer
Michelle Kirmser
First Vice President
General Counsel
Rebecca Kugelman
First Vice President
Deposit Operations Manager
Adam Kuras
First Senior Vice President
Chief Lending Officer
Kenneth Plinio
First Vice President
Mortgage Loan Operations
Manager
Rosemary Fellner
Senior Vice President
Chief Marketing Officer
Stephen Rooney
Senior Vice President
Chief Credit Officer
Christopher Fenimore
First Vice President
Chief Compliance Officer
Bridget Walsh
First Vice President
Human Resources Director
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Board of Directors
David Dallas
Chairman of the Board
CEO, Dallas Group of America, Inc.
Allen Tucker
Vice Chairman of the Board
Chairman, Tucker Enterprises
Dr. Mark Brody
Director
Managing Member, Financial Planning
Analysts, LLC
Wayne Courtright
Director
Retired, Former Banker
James Hughes
Director
President/CEO, Unity Bank
Peter Maricondo
Director
Retired Financial Consultant
Raj Patel
Director
President/CEO, Raja Group
Donald Souders, Jr.
Director
Attorney/Partner, Florio Perrucci Steinhardt
Cappelli Tipton & Taylor
Robert Dallas, II
Director
President, Dallas Group of America, Inc.
Aaron Tucker
Director
President, Tucker Enterprises
Dr. Mary Gross
Director
Founder, Human Edge Resources, LLC
Shareholder Information
Annual Meeting
Shareholders of Unity Bancorp, Inc. are cordially invited to the Annual Meeting of Shareholders.
The meeting will be held virtually and available at a meeting link. Please see 2021 Unity Bancorp
Proxy for date and time.
Stock Listing
NASDAQ
Symbol: UNTY
Transfer Agent and Registrar
Computershare, Inc.
PO Box 30170
College Station, Texas 77842-3170
800.368.5948
Computershare.com
Investor Inquiries
James Hughes
908.713.4306 | James.Hughes@unitybank.com
Independent Registered Public Accounting Firm
RSM US LLP
New York, New York
Legal Counsel
Windels Marx Lane & Mittendorf, LLP
New Brunswick, New Jersey
LOCATI ONS
New Jersey
Bergen County:
4 Emerson Plaza West Emerson, NJ 07630
475 Franklin Turnpike Ramsey, NJ 07446
Hunterdon County:
64 Old Highway 22 Clinton, NJ 08809
157 Main St. Flemington, NJ 08822
370 Route 22 W. Whitehouse Station, NJ 08889
Middlesex County:
1746 Oak Tree Rd. Edison, NJ 08820
(pictured on cover)
104 Raritan Ave. Highland Park, NJ 08904
1230 Bound Brook Rd. Middlesex, NJ 08846
2426 Plainfield Ave. South Plainfield, NJ 07080
Somerset County:
450 Somerset St. North Plainfield, NJ 07060
120 Cedar Grove Ln. Somerset, NJ 08873
12 Mountain Ave. Somerville, NJ 08876
Union County:
628 North Wood Ave. Linden, NJ 07036
2222 South Ave. Scotch Plains, NJ 07076
952 Stuyvesant Ave. Union, NJ 07083
Warren County:
1225 Route 22 W. Phillipsburg, NJ 08865
5 E. Asbury Anderson Rd. Washington, NJ 07882
Pennsylvania
Northampton County:
2850 Easton Ave. Bethlehem, PA 18017
1700 Sullivan Trail Forks, PA 18040
UN ITY BAN COR P, INC
64 Old Highway 22 Clinton, NJ 08809
unitybank.com 800.618.2265